Five years on from its ABS licence, Co-operative Legal Services sees income and profits jump
Howells: tighter strategic focus on the later life planning market
Co-operative Legal Services (CLS) recorded a 22% jump in turnover in 2016 and tripled its profit as it continues to recover from the difficulties it experienced in previous years.
Coming almost five years to the day since it received an alternative business structure licence – one of the first three awarded by the Solicitors Regulation Authority – the Co-operative Group also revealed that it was bringing its legal services operation together with its funerals business to create a Life Planning division.
Legal services revenues rose from £18m to £22m in 2016, “lifted mainly by more people coming to us for estate planning services, as well as our acquisition of Collective Legal Solutions (now known as Co-op Estate Planning)”, the group’s annual results announcement recorded. In 2012, it was £33m.
Operating profits went from £700,000 in 2015 to £2.2m last year, although the accounts have been restated to show zero profit to £1.5m to reflect that the £700,000, and the same amount this year, was put towards shared group membership services. In 2014, CLS recorded a loss of £5m. Profits in 2012 were minimal with the business investing for growth.
The announcement said: “We believe in providing legal services that are easy to access, giving fast and effective legal support at prices that are great value for money. In 2016, we invested in being able to take will, probate and conveyancing instructions online. Our members and clients gave us a vote of confidence and we’ll develop more new services in 2017…
“While we offer a broad range of legal services, our largest practice areas currently are estate planning and administration… Just as our members and clients are benefiting from our strategy, so it’s helping our profitability.”
Buying Collective Legal Solutions at the end of 2015 expanded CLS’s physical presence, putting around 100 staff in the field to speak to more than 17,000 people at hundreds of community events around England and Wales, and then following up with would-be clients in their homes if requested.
In all, CLS now has 470 staff – back to the same level it had in 2012 – and is expanding in each of its Sheffield, Bristol and Manchester offices.
The announcement added: “Echoing our ethos that principles are more important than profits, our partnership with Remember a Charity passed the £20m milestone.”
CLS will very much be the junior partner in the new division, with Co-op Funeralcare recording sales of £307m and underlying operating profit of £69m.
With the funerals business expanding, the announcement said that “to build on this momentum, we are creating a single integrated team incorporating both our Funeralcare and Legal Services’ business, with a clear aim of expanding our business for the benefit of our members to help them with life planning”.
CLS is being cagey about the impact of the government’s personal injury reforms on its business, saying that it is being led by what its insurance division – the source of most of its personal injury work – decides to put in and out of scope in policies as a result.
CLS managing director Matt Howells said: “These results show the continued progress we are making on the rebuild of Co-op Legal Services with both increased revenue and profitability…
“In May last year, we rebranded alongside the wider Co-op rebrand and launched our new member legal support helpline which is designed to help members solve everyday legal matters.
“As part of the new membership proposition, Co-op members will also receive 5% back across a number of our products and services as well as 1% going to their chosen local communities.
“Our integration with Funeralcare signals our tighter strategic focus on the later life planning market and the opportunity to leverage the network and scale of the branch network across the UK as we continue to expand.”
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